The Australian Initial Public Offerings (IPOs) market is delivering a robust performance, with returns from companies listing on the Australian Securities Exchange (ASX) striking 1.3% over the first quarter, a strong 6.7% outperformance of the S&P/ASX 200, according to a new barometer, the OnMarket First Quarter IPO Report.
Ben Bucknell, chief executive of OnMarket BookBuilds (OMB), the creator of the world’s first app giving investors free and fair access to IPOs, said the data highlights that IPOs can deliver impressive growth for investors.
“The OnMarket First Quarter IPO Report reveals that the average return of the 13 companies which listed on the ASX in the first quarter of 1.3% outperformed the S&P/ASX 200, which fell 5.4%, by an impressive margin of 6.7%. Large-cap shares, as measured by the S&P/ASX 50, fell 5.1%, disappointing many investors,” said Bucknell.
“Of the 13 IPOs on the ASX during the first quarter, first-day returns averaged 9.2%, representing a handsome gain for investors,” said Bucknell.
“The strong returns revealed by the OnMarket First Quarter IPO Report follow on from impressive IPO performance in 2015. The average return of the 93 companies that listed on the ASX in 2015 was 23.0% by the year’s end, according to analysis of Dealogic data by OnMarket. Compare that with the S&P/ASX 200, which lost 3.0% in the same period, and the asset class clearly outperformed.”
“With ASX IPO activity in Australia outstripping activity in the US, where the IPO market has been almost dead, there has been ample opportunity for local investors to take advantage of companies going public. This tells you that even as markets swing, there is a decent pool of companies with sound business plans ready to grow, and Australian investors are ready to back them,” Bucknell said.
“The chart below reveals that companies listing on the ASX in the first quarter represented a broad range of sectors, including finance and technology, with miners notably absent from the list. So as commodity prices have fallen, so too have resource listings, and no surprises there,” he said.
| Company Name | ASX Code | Listing Date | Sector | IPO Value | Market Capitalisation | Issue Price | First Day Return |
| Total Face Group Ltd | TFG | 14-Jan-16 | Consumer Discretionary | $6,000,000 | $29,235,324 | $0.40 | 0.0% |
| Recce Ltd | RCE | 15-Jan-16 | Health Care | $5,208,000 | $13,698,290 | $0.20 | 50.0% |
| Novatti Group Ltd | NOV | 18-Jan-16 | Information Technology | $7,000,000 | $17,576,765 | $0.20 | 0.0% |
| iCandy Interactive Ltd | ICI | 4-Feb-16 | Information Technology | $4,500,000 | $45,856,665 | $0.20 | 25.0% |
| Global Fortune Investment Ltd | GFI | 4-Feb-16 | Metals and Mining | $4,008,089 | $19,008,090 | $0.30 | 0.0% |
| Henry Morgan Ltd | HML | 8-Feb-16 | LIC | $15,600,000 | $15,600,999 | $1.00 | 10.0% |
| Tesserent Ltd | TNT | 15-Feb-16 | Information Technology | $7,000,000 | $20,491,919 | $0.20 | 0.0% |
| Vectus Biosystems Ltd | VBS | 23-Feb-16 | Health Care | $5,174,447 | $36,223,097 | $1.55 | 0.0% |
| Ding Sheng Xin Finance Co Ltd | DXF | 3-Mar-16 | Financials | $10,268,006 | $310,268,009 | $0.60 | 20.0% |
| Oneview Healthcare plc | ONE | 17-Mar-16 | Health Care | $62,400,617 | $208,517,206 | $3.58 | 2.5% |
| N1 Holdings Ltd | N1H | 18-Mar-16 | Financials | $5,000,000 | $16,208,751 | $0.20 | 10.0% |
| Soon Mining Ltd | SMG | 18-Mar-16 | Metals and Mining | $4,515,400 | $31,425,769 | $0.20 | -10.0% |
| JC International Group Ltd | JCI | 23-Mar-16 | Industrials | $5,584,764 | $45,584,765 | $0.80 | 12.5% |
The new OnMarket app is completely free to investors: it’s free to sign up and free to bid and invest in IPOs. All of this can be done with a smart phone.
“Investors can easily swipe through the companies going public through the OnMarket platform. If an IPO interests them, members can see the prospectus and independent research about the company,” said Bucknell.
OnMarket’s best-in-breed ‘More Info’ panel includes video interviews with management, company releases, third party research, and relevant press articles. The platform was designed in response to survey data that shows investors need 7.2 sources of information before making an investment decision and allows users to be truly self-directed.
OMB’s presence as a fintech disruptor was firmly established when the technology was launched by Prime Minister Malcolm Turnbull in October 2015, who said at the time: “The brilliance of this is simply that it makes it easier to buy, to trade. This will open up the investment market considerably.”
